Neoliberalism, the latest phase of capitalism was a response of the capitalist system to the crisis of the 1970s. It gained prominence since the 1980s when the USA and the UK started implementing neoliberalism by embarking upon a programme of economic restructuring. This was later imposed on the entire world through international financial institutions like the IMF and the World Bank. By the 1990s, most of the countries across the world incorporated neoliberal policies as part of their programmes. With the dismantling of the Soviet Union and the serious setback to socialism in the east European countries, the correlation of forces changed in favour of imperialism. Many of the governments including those led by social democratic parties adopted neoliberalism, which has now become the dominant ideology in the world.

The major thrust of neoliberalism has been to safeguard the profits of the capitalists. The process of restructuring might have differed in different countries but broadly the neoliberal policy framework included privatisation, liberalisation and flexibilisation of labour, drastic reductions in the welfare expenditure by the State etc in order to cut down on wages and other benefits of workers. The rights of the workers including their right to organisation and collective bargaining, the living conditions of the common people and their democratic rights came under severe attack. The working class being generally in the forefront of the struggles against such attacks, weakening the organised strength of the working class, of their unions, and of working class resistance to the employers’ offensive, was one of the major objectives of neoliberalism.

STATE INTERVENTION TO PROTECT INTERESTS OF CAPITALIST CLASS

According to the neoliberal ideology, market economy functions in a most efficient manner without any State intervention. But, in practice, what is done is not non-intervention of the State, but its open intervention in favour of the employers, to enable transfer of wealth and resources from the people to the capitalist class. This has now assumed the nature of primitive accumulation.

Here we will confine to the impact of neoliberalism on the workers and the organised trade union movement, particularly the class based trade unions. In all the countries that have embraced neoliberalism, serious and determined attempts are being made to weaken the organised working class movement. Labour laws are amended in favour of the employers, to snatch away the hard won rights of the workers. The employers are given a free hand to increase their attacks on workers and their working conditions in various ways.

There has been vast increase in what are called ‘non standard work arrangements’ or ‘precarious’ or ‘vulnerable’ employment across the world including in the advanced capitalist countries. While the number of permanent employees is drastically brought down, the number of workers who are working in irregular forms of employment like part time, temporary, casual, fixed term, and zero hour contracts, the number of home based workers etc has increased.

In India, the number of contract workers employed for permanent or perennial types of jobs has increased many times. Apprentices are forced to work for several years for a small fraction of wages paid to permanent workers, in many automobile and other factories including those of big multinational corporations. This trend is not only seen in the private sector but public sector and government sectors also. Hundreds of thousands of workers with working conditions similar to the unorganised sector workers are employed in the public sector and in various government departments. Around one crore workers, most of them women, are employed in the different schemes run by the government of India without even being recognised as workers.

A report of the ILO ‘World Employment and Social Outlook – Trends 2017’ says that 140 crores people or over 42 per cent of the total workers across the world in 2017 are in such ‘vulnerable’ or ‘precarious’ jobs. According to the report one in two workers in emerging economies and four out of five workers in developing countries are in such jobs. Reducing permanent employment and getting work done through such ‘vulnerable’ jobs is nothing but an atrocious ploy of the employers to bring down the share of wages and further increase exploitation of workers. The governments in many countries are trying to legalise such loot by the employers by amending the labour laws.

The IMF World Economic Outlook 2017 shows that between 1991 and 2014 the share of labour declined in 29 out of the 50 largest economies of the world. In 2014 these countries accounted for two thirds of the world GDP. In 7 out of the 10 major industries the share of workers’ wages declined. The number of workers earning less than $ 3.10 per day is expected to increase by around 30 lakhs per year in the developing countries over the next two years.

COLLECTIVE BARGAINING STRENGTH REDUCED

These changes have not only brought down the share of wages. They have also brought down the collective bargaining strength of the workers. The precarious nature of their work, the uncertainty of even their low incomes, and the scattered nature of the workplaces make it very difficult to organise these workers in trade unions. In the absence of the united strength of the workers, which the unions represent, the workers have no strength to bargain with the employers. Instead they compete with one another for the sheer necessity to survive. This further shifts the balance of power in favour of the employers.

Globalisation and liberalisation have enabled production processes to be shifted freely and relocated in countries with abundant supply cheap labour and to places where the organised strength of the working class and their unions are weak. Governments have been competing with each other by offering the services of the workers in their countries at ‘competitive wages’ and assuring the big corporations, foreign and domestic, of ‘simplifying’ labour laws to give them a free hand in exploiting the workers. They are bending over backwards to woo ‘investors’ by improving their ‘Ease of Doing Business’ index.

The threat of capital flight, of shifting production to other countries and locations leading to job losses in the current location are being utilised to create pressure on the workers and their unions to agree to cuts in wages and benefits in order to protect their jobs. There have been many instances of unions succumbing to such pressure. In Europe, unions are entering into agreements with companies, in what is called ‘competitive corporatism’ by which they agree not to demand wage rises, for long term wage agreements, and new work arrangements. In the USA and Canada, employers have been pressurising the unions to sign flexibilisation agreements and forego the right to strike in exchange of job protection, union recognition etc. The ‘shared austerity’ in Sweden, ‘co managed austerity’ in Germany and ‘punitive austerity’ in Canada and United States are some such examples. In India too there have been many instances where unions are being coerced to forego benefits and wage rises or face job losses.

In the USA, 28 states have adopted the so called ‘Right to work’ laws. The name is misleading. These are not laws that protect the right to work of the workers. The ‘rights’ they talk about are the ‘right’ of workers not to join unions, not pay union fees etc. They are meant to prevent workers from joining unions, from paying union fees, make unions financially unsustainable and ultimately make workplaces free from unions. The ‘Back to work’ legislation in Canada is used to end strikes in sectors that the government considers essential, by imposing huge fines on the unions and workers.

In the UK ‘partnership’ was used as a device by New Labour to develop ‘neoliberal trade union’ movement. This meant that unions had to denounce class conflict and participate in increasing production and profits for the employers. Such unions were paid huge State subsidies for doing the bidding of neoliberalism. Money was paid to such unions on different pretexts like work place learning, training, ‘modernisation’ etc and for international work. These unions were made what is called ‘prisoners and pensioners’ of the neoliberal state.

The proposed amendments to labour laws by the present BJP government, its attempts to club the 44 central labour laws into Four Codes are similar attempts to weaken the trade union movement and the bargaining strength of the workers in our country.

(to be continued)